Mergers and Acquisitions
Mergers and acquisitions are business considerations or business agreements in which two or more firms combine forces to develop or co-market a product (merger) or in which one company buys out the assets and assumes the obligations of another firm (acquisition).
One way or another, there is always a valid business strategy behind those options: A company may find that the most cost effective method of entering a new market is simply to buy an existing company that serves that market. On the other hand, a company may determine that two companies together are stronger and more valuable than two separate companies, especially during tough times.
Mergers and acquisitions can be structured in several forms:
- Vertical mergers
- Horizontal mergers
Factors that are considered for mergers and acquisitions are:
- Cost of the transaction
- Tax and legal issues
Some of the benefits of mergers and acquisitions are:
- Economy of scale
- Economy of scope
- Staff reduction
- New technology
- Market reach and industry visibility
- Better management
- Quality improvement
- Tax advantages
- Value creation
Are you thinking about or planning a merger orconsidering the acquisition of another company? Talk with theteam of advisers at TWC Finance today to benefit from their expertise and to gain some useful tools.